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RICHARD QUEST, HOST: Tonight, the veto stands. The British prime minister tells me there's no movement in the negotiations with Brussels.

(BEGIN VIDEO CLIP)

DAVID CAMERON, PRIME MINISTER OF BRITAIN: We asked for safeguards, we asked for conditions, particularly around the single market and financial services. We didn't get those safeguards. We haven't got those safeguards, so they can't have a treaty inside the European Union.

Good evening. Live from the World Economic Forum in Davos in Switzerland. Britain says be bold. The prime minister, David Cameron, told EU leaders they must get a grip if they want to fix the debt crisis.

Mr. Cameron said it wasn't too late to revive the eurozone, as long as they were ready to fight for it.

(BEGIN VIDEO CLIP)

CAMERON: I stood on this platform only a year ago and said that Europe could recover its dynamism. I still believe we can, but only if we are bold, only if we fight for our prosperity, get to grips with our debt, take bold decisions on deregulation, on opening up the single market, on innovation, on trade, and address the fundamental issues at the heart of the eurozone crisis.

All these decisions, they lie in our own hands. They are the test of Europe's leaders in the months ahead. Yes, the stakes are high. They are incredibly high. But there's nothing about the current crisis that we don't understand.

(END VIDEO CLIP)

QUEST: You can hear the frustration in David Cameron's voice, though that does not mean he's rethinking Britain's stance on the new EU treaty.

Today, the prime minister told me that EU leaders have done nothing to change his mind on that veto. I asked him if he was upset they hadn't made more progress in tackling the crisis.

(BEGIN VIDEOTAPE)

CAMERON: Well, of course it matters not just to the countries of the eurozone, but also to their neighbors, like Britain, that the crisis is resolved. But I'm not saying it's easy. I'm not saying there are some simple switches they've got to flick.

These are difficult decisions. They're sometimes expensive decisions. And they involve politicians having to give up powers, as well. These are very tough things they need to do.

But if you want the single currency to work, it seems to me there are some short-term things that have to be done and some longer-term issues that have to be grappled with.

QUEST: Both Chancellor Merkel and yourself are basically saying the same message in a different way: "Get on with it."

CAMERON: Well, you could put it like that, but what I prefer to say is short-term, to ease the current crisis, you've got to resolve the Greek situation, you've got to strengthen the banks, and the firewall's got to be big enough to deal with any contagion in the system.

Now, we've been saying this. You could almost set it to music because politicians have been saying it for so long. But we've got to deliver it in the beginning of this year, and that's only the start.

QUEST: On Britain's relationship with eurozone partners and your EU partners, following December, is there any movement that you can see that would allow you to rejoin the full debate now? Because you're going to Brussels on Monday, there's going to be a European summit, so are you still on the outside, basically?

CAMERON: No, we're on the inside. Brussels on Monday, we're going to be talking about what really matters, which is the single market, competitiveness, and how we help our economies to grow. Britain is at the heart of that debate.

Now, in terms of the new treaty, outside the European Union, for the eurozone members and others, that treaty's going to be about the fiscal union that they want to bring about as members of the eurozone.

We're not disadvantaged by not being part of that, because we're not part of the euro, and we're not going to join the euro. So, I think we should focus on what really matters for Britain, which is actually getting the single market -- moving.

But the reason we didn't join the treaty is the same reason we're not joining the treaty today, which is that we asked for safeguards, we asked for conditions, particularly around the single market and financial services.

We didn't get those safeguards. We haven't got those safeguards, so they can't have a treaty inside the European Union.

QUEST: Does not the dynamic change within the 27 once they have all got their fiscal pact, which may or many not come in March or sometime this year, the dynamics change and you have to play a different role?

CAMERON: Well, the dynamic changed when part of the European Union decided to have a single currency, the euro. That was the moment at which the dynamic changed.

And from then on, frankly, countries like Britain that are in the single market but not in the single currency, have been basically engaging in Europe in a slightly different way, absolutely committed to the single market but, frankly, out of the room when the eurozone issues are discussed because we're not in this currency, we don't want to be in this currency.

But I think we should take a relaxed view about that. Britain gets a lot out of Europe through the single market, though our engagement on foreign affairs and other issues. But we don't want to be in the eurozone. We'd rather have our own interest rates, set our own economic policy for the benefit of our own people.

QUEST: So coming back to the idea of a treaty which, of course, Britain could sign up to even though not signing the part of the fiscal pact. Can you see movement that would enable you to sign up to such a treaty, even though you wouldn't be part of the fiscal pact?

CAMERON: I haven't seen that movement, because the conditions we set out were the conditions we set out, and they haven't been moved towards, so I don't see that development.

QUEST: So, there's no movement on that end.

CAMERON: There hasn't been. The members who want the fiscal union are going ahead with that treaty. Outside the European Union, it's obviously in our interest it's restricted to the fiscal union and doesn't stray into matters covered by the European Union treaties, and I think that will be the case.

(END VIDEOTAPE)

QUEST: The British prime minister, David Cameron, and more from Mr. Cameron later in the program.

One of the reasons, of course, and one of the issues that's on his agenda, Greece. Well, it's now announced it is resuming talks with its private creditors. Charles Dallara and Jean Lemiere were back in Athens today negotiating with the Greek government. The parties currently disagree on the rate of interest Greece would pay on new bonds. A government spokesman says talks are at a delicate phase.

The German chancellor, Angela Merkel, has indicated Greece won't be a focus of Monday's meeting at EU summit. That's because, she says, the Troika -- the IMF, the ECB, and the EU -- won't have finished its later report by then. Mrs. Merkel was speaking at a press conference with Spain's Prime Minister Rajoy, and she said Greek talks with creditors were still on track.

When we need to understand these matters, we turn to Ken Rogoff, the professor of economics at Harvard. Good to see you, Ken.

KEN ROGOFF, PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY: You as well.

QUEST: Welcome to --

ROGOFF: Thank you, thank you.

QUEST: -- our interview in Davos. So, let's start. We've now heard Merkel say something must be done, the frustration of David Cameron says something must be done. There seems to be an urgency that something must be done.

ROGOFF: Come on. We've heard this urgency for two years, and they keep saying, "This is it, we have solved the problem," and we're nowhere near the end of this, I don't think.

QUEST: So why is it -- what is the problem, now? Is it just Greece? Is it Italy? Where does the problem lie?

ROGOFF: It certainly is not just Greece. There are other countries that need deep debt restructurings. We're talking about Portugal, possibly Ireland, possibly Spain. They need to decide where to draw the line, where it won't cost so much that it's better to save than not to save. But Greece is -- that's not going to work.

QUEST: Greece is going to default. Whatever we call it, whether it's a default or -- that is going to happen. How worried are you, now, about Italy and, say, Spain?

ROGOFF: Well, they're going to have to draw a line somewhere. It's more like how worried am I about Portugal and possibly Ireland.

QUEST: Really?

ROGOFF: Yes, because as soon as they -- they used to say Greece was not a problem, don't worry about Greece. Now, well, maybe Greece is bad. Now they're saying, but Portugal and Ireland aren't a problem, don't worry about anybody else. And it -- they are.

QUEST: But they say to me, and you heard David Cameron there, and Merkel, they say these are very complicated issues that take time to deliver. Michel Barnier said this to me.

ROGOFF: Well, they need two things. They need these restructurings. They need a new constitution, and goodness, that takes time. These governmental treaties, that's just not going to do the job. The Maastricht Treaty didn't do the job. So, they really need a dramatic change, a tighter union, political, fiscal, regulatory.

QUEST: In Davos, how would you gauge -- you've been coming to Davos a year or two, I believe -- how would you gauge the mood? Because the economic forecasts are bad.

ROGOFF: Yes.

QUEST: And yet, people still -- business leaders seem to be reasonably confident.

ROGOFF: That's a good -- I would say that's right. So, certainly if you ask the mood among people making forecasts, it doesn't add up. A lot of debt, slow growth, meaning we're not getting out of it.

Yet the business people say, "Well, we can get money if the deal needs to be done, we're getting it done." Maybe that's because a lot of them are doing well even when the economy's not.

QUEST: All right. Time for the Curve. Join me at the Curve. First of all, your entrance fee.

ROGOFF: Oh, my gosh.

QUEST: Hand in the pocket. By the way, the money -- just in case anyone's in any doubt, the money is going to Mountain Rescue, the people that we -- we were filming with early in the week, a voluntary charity. So, money in the -- thank you.

So, the money does go to Swiss Mountain Rescue for this area. Where would you like to be? Make your mark on the Curve.

ROGOFF: Well, I'm not sure I'm going to try -- quite try to compete with Nouriel, but I think I'm going to go down here.

QUEST: That's a pretty pessimistic view on the Curve.

ROGOFF: I'm afraid so. Well, they're several years behind the curve.

QUEST: Several years. Which if you're right, and I don't deny, but you may be, if you're right, then things do get worse before they get better.

ROGOFF: Yes, that 100 percent that's what I think. Although it might not happen this year. Might not get worse this year.

QUEST: That's even worse! That means we've got more time on this!

ROGOFF: Yes, yes. I mean, they -- well, they're printing money in Europe, and that buys time. It works for a while. It can work for a few years, even. But it can make things worse.

QUEST: Good to see you.

ROGOFF: Pleasure, Richard.

QUEST: As always.

ROGOFF: Great to see you.

QUEST: Many thanks, indeed. The Curve, which tells us what's been happening. I'll explain who's where later in the program. Good to see you and many thanks, indeed.

Now, traders seem pleased that talks are back on in Greece. Europe was up strongly across the board. Today was the first chance they had to react to last night's Fed statement pushing banking stocks higher. Sector stocks were -- performed well, too. The biggest gainers were the mining companies in London and car makers in Frankfurt.

Not for Wall Street, one stock to watch is Netflix, up 25 percent. It surprised everyone with a strong set of earnings last night. The Wall Street market and the Dow Jones currently open -- whoa. Look at that. Isn't that an exciting day? Hasn't budged.

When we come back, how a sprinkling of mistakes snowballed into a crisis. One of the architects of the Maastricht Treaty tells me how it all went so wrong. QUEST MEANS BUSINESS, good evening, we're live in Davos.

(COMMERCIAL BREAK)

QUEST: There was no oversight, there was no budget control, there was no surveillance. The glaring gaps in the Maastricht Treaty which many ignored, according to Peter Sutherland, one of the architects of that treaty that led to the creation of the euro. He was also the youngest ever EU commissioner when appointed in 1985.

Today, I asked him if he agrees that the eurozone is in a dire and dangerous place.

(BEGIN VIDEOTAPE)

PETER SUTHERLAND, FORMER EU COMMISSIONER: We are where we are because the Maastricht Treaty, which set the whole thing up, didn't contain the mechanisms for control and discipline which are and were required and which are now going to be included in the very necessary fiscal compact, which will deal with the future.

QUEST: Why have you got any more hope about the fiscal compact than we had with the stability and growth pact under terms of Maastricht? Maastricht was quite clear.

SUTHERLAND: It was clear in setting the parameters for deficit management and debt, but it didn't contain oversight. It didn't contain the necessary mechanisms for looking at national budgets in advance. It didn't provide for surveillance, and it didn't provide for sanctions. And that will now be provided, and that will be very important.

It will be a federalizing impact on Europe, but it's an absolutely necessary part of the euro, and if some people saw that early on, others ignored it.

QUEST: Unless it gets watered down in the negotiations, and as the ECB said in its recent letter to the negotiators, that's exactly what they perceive happening in the terms on, for example, excess deficits in exceptional times.

SUTHERLAND: Absolutely. They are absolutely right, and they're worried about it. I believe that it will not be watered down excessively largely because I believe that Germany is absolutely committed to it and sees it as vital to their continued functioning and enabling of the whole euro.

QUEST: But isn't the -- isn't the truth of this whole debate whether or not Europe moves to a more federal system? And whichever way you slice this cake, you're going to eventually end up eating that piece.

SUTHERLAND: It's absolutely about integration. I believe in integration. I believe in the original argument about the euro, that if you had a whole lot of currencies, as the Italians did for decades, devaluing to gain competitive advantage in a single market area, it couldn't survive.

And that is why we have to make a success of the euro. If it were to fail tomorrow, as Germany recognizes more than anybody else, the Deutsche mark would soar, every other currency would go down, and the result would be the disruption and failure of the European Union as a whole.

QUEST: Neither you nor I believe that the euro will fail completely. But is it entirely feasible that all the countries that are in it today are not in it in the future? Greece, in other words. Let's call a spade a shovel.

SUTHERLAND: There is a legitimate concern in keeping Greece within the eurozone. Not merely because there is no mechanism for it to leave. There is no mechanism for it to be put out, but equally there is no mechanism, and legalities count here, for it to leave if it wishes to.

The risk, obviously, is contagion. If Greece goes, how does it affect others? Now, maybe you can build a firewall. I'm sure that if you've additional support put into the EFSF or the greater empowerment and activity -- although it's growing all the time -- on the ECB, you'll be able to protect against that. But let's hope that it doesn't come to this.

QUEST: You've already given me your two Swiss francs. Where on the Curve of Recovery, just for a start, where would you like to be? That's policy makers behind the curve, that's ahead of the curve.

SUTHERLAND: Where would I like to be? I would --

QUEST: No -- all right, good point, Peter, good point. Where do you think we are at the moment in the current economic phases.

SUTHERLAND: I think we are here.

(END VIDEOTAPE)

QUEST: That is Peter Sutherland, former EU commissioner, once again on the Curve of Recovery, most people seeming to suggest they are still -- the policy makers are behind the curve.

When we come back, the thorny subject of bankers' bonuses and we talked to one top banker for his views of that five-letter word.

(BEGIN VIDEO CLIP)

BOB DIAMOND, CEO, BARCLAYS: Every time I hear a political leader mention the eradication of pay for failure, I'd like to also hear them talk about rewards for success.

(END VIDEO CLIP)

QUEST: The chief exec of Barclays, Bob Diamond, on QUEST MEANS BUSINESS in a moment.

(COMMERCIAL BREAK)

QUEST: As you can see on the Curve of Recovery and policy action, most of the people we've spoken to believe that policy makers, governments are still behind the curve in dealing with what is actually happening out there in the real world.

Well, one chief executive is happy to be different. He's Bob Diamond. The CEO of Barclays Bank says he's more positive about 2012 than most of his colleagues. It's encouraging at a time when the IMF and World Bank are downgrading global growth forecasts. I asked Bob Diamond where he thinks we're headed.

(BEGIN VIDEOTAPE)

DIAMOND: I think we're going to be pleasantly surprised with the fourth quarter GNP in the US. I think it may have a three handle. We haven't seen that in a while.

I think in Europe, the activity in Ireland and Portugal and Spain, particularly in Spain with the new administration in terms of tackling the -- reducing the public spending has been ahead of what we would have expected.

But most importantly, the actions of the governor of the Central Bank, Draghi, the long term repo. It's taken some of the funding issues off the table.

I think in the emerging economies, there's been a lot of worry about a slowdown, and I think that's a bit overstated. So, I'm a bit more positive about 2012 versus the consensus.

QUEST: You must share the frustration of others at the inability and ineffectual responses, some would say, of the eurozone governments in actually getting and dealing with this crisis.

DIAMOND: Well, I remember talking to you a year ago at Davos about the risk we had in 2011 of chronic event risk unless the issue of fiscal integration was tackled, and unless the issues around the European Central Bank were tackled, and that's exactly what played out.

I think going into 2012, we're seeing some progress in both of those areas. I think the progress is incomplete, but it's substantial. And so, I do feel better.

You know my view. I think the euro will be here. I think it will -- it will be a strong -- over time, a strong currency. But we have to tackle the public spending issues, and I think the strong move toward fiscal integration, the strong move toward reducing the deficit and the debt is off to a good start.

QUEST: I cannot talk to you without raising bonuses.

DIAMOND: Richard, let's separate the issues. I think getting some of the emotion out of this is healthy. It's about pay for performance, and I hear a lot of people talk about the eradication of pay for failure.

We support that. No one wants to see pay for failure. But every time I hear a political leader mention the eradication of pay for failure, I'd like to also hear them talk about rewards for success.

And I think balancing our responsibility and being competitive is the challenge we have, and we accept that challenge in terms of how we compensate in this industry.

QUEST: So you won't feel the need this year to make a gesture? To make any form of --

DIAMOND: Absolutely. I think, as I said, Richard, it's my job to balance being responsible, sensitive to the public mood, with being competitive. And I think in terms of the form of compensation, I think compensation will clearly be down in the industry this year.

But I think in terms of deferral levels and the amount of equity people have, we have to be sensitive to the environment we're in.

QUEST: So, you'll take your compensation package? That will be given to you or offered to you by the board at the appropriate time?

DIAMOND: That's not a decision that I've even been offered at this point, Richard.

QUEST: Finally, we do need to look at the Curve. Behind the curve with policy makers dealing with the crisis, ahead of the curve. Where do you think they are realistically?

DIAMOND: I'm going to say behind the curve, and I'll show you where - - I think in terms of monetary policy, they're ahead of the curve. I think in terms of fiscal policy, they're behind. In terms of understanding the importance of passing the mantel of growth to the private sector --

QUEST: Right.

DIAMOND: -- they're behind the curve. So, I'm right there.

(END VIDEOTAPE)

QUEST: Bob Diamond, the chief executive of Barclays, and his views and the whole question of bankers' bonuses, @RichardQuest is the Twitter name, handle, or whatever you call it these days, @RichardQuest is where you can join and give me your views and thoughts on bankers' bonuses. We can have the debate. I'll be reading your views on my little handheld.

When we come back in a moment, his veto left him persona non grata in Brussels. So now, does David Cameron think that fellow EU leaders are ahead or behind the curve? I'll ask the British prime minister in a moment. QUEST MEANS BUSINESS, we're live, we're in Davos.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment, but this is CNN, and on this network, the news always comes first. Max Foster is at CNN London with the headlines.

MAX FOSTER, CNN ANCHOR: Richard, heavy equipment digs through the rubble of three adjacent buildings that have collapsed without warning in Rio de Janeiro. At least three people were killed when the buildings suddenly came down late on Wednesday, 16 others are missing. Authorities aren't sure what caused the collapse.

The two aid workers rescued in Somalia have arrived at a US naval air station in Sicily for tests. American Jessica Buchanan will be reunited with her father today, and she and the Danish colleague, Poul Thisted, were freed by US commandos three months after their kidnapping.

The founder of the defunct breast implant company PIP is under arrest in France. Jean-Claude Mas has admitted non-authorized silicon was used in PIP's implants. Prosecutors are investigating claims from one woman's family that the implants caused cancer and her untimely death.

Syrian opposition activists say more than 50 people were killed on Thursday in clashes across the country and that the victims include 10 children and 4 women. We're also being told that fighting broke out between security forces and army defectors.

Australian police rushed Prime Minister Julia Gillard and the opposition leader into a car on Thursday to escape an angry protest. The politicians were besieged by aboriginal rights activists at an Australia Day event at a restaurant. The prime minister lost a shoe in the scramble but got out otherwise unharmed.

Back to QUEST MEANS BUSINESS, now, live from Davos.

(MUSIC PLAYING)

RICHARD QUEST, HOST, QUEST MEANS BUSINESS: The British prime minister, David Cameron, says he won't let up on his austerity plan for Britain, even though the economy is now in reverse. His government is making $120 billion worth of cuts.

The PM remains convinced it's the best course of action, even though UKR points shrank. It was 0.2 percent in Q4. I asked David Cameron if the U.K.'s heading towards a full-scale recession.

(BEGIN VIDEO CLIP)

DAVID CAMERON, U.K. PRIME MINISTER: We don't make forecasts as a government. We've actually set up an independent body, the Office of Budget Responsibility. They're not forecasting that to happen. They forecast growth for 2012, and I hope we can achieve that growth.

But, clearly, we're living in very challenging economic times. It's not just the Eurozone crisis that has done the damage. Also there's been the rise of food and fuel prices that have squeezed household incomes in the U.K. We believe that's going to ease this year as inflation comes down. But these are tough times, and we have to take bold measures.

QUEST: Right. You've taken bold measures and the austerity measures that you have implemented, but as Lord Keynes (inaudible) said, you know, when the fact change, I change my mind. What do you do, sir?

So if the Eurozone crisis continues and worsens as some predict, I'm not asking you are you going to backtrack on austerity. What I am asking is whether you'll go -- would be prepared to countenance (ph) to taking your foot off the pedals like?

CAMERON: Well, the IMF, I think, gave us some pretty clear advice yesterday, when asked, you know, is Britain, a country with the fiscal space to take its foot off the pedal, Christine Lagarde said very clearly, no, it isn't.

Now, I'm clear we have a big budget deficit. We have a big stock of debt. We need to show the world we're paring down that deficit, dealing with that debt. And that's one of the keys to recovery, not just because it's a good thing in itself, but it's given us, the fact we have a plan, some of the lowest interest rates in Europe, just over 2 percent.

Now if you took your foot off the pedal, and you eased up and spent some more money, borrowed some more money in a discretionary sense, you could lose all the benefit of that by those interest rates going up. One percent on interest rates is a thousand times on a family's mortgage. That would be the biggest hit to living standards there could be.

QUEST: Do you believe that whether it's Europe or the global financial crisis, do you believe that policymakers, yourself included, and Eurozone and IMF, have got ahead of the curve? Or are you still behind the curve, or is one behind the curve in dealing with this crisis?

CAMERON: I think you can look at individual countries, and say are you ahead of the curve on having a plan to deal with your debt and deficit, but I think in the U.K. we are ahead of that.

I think for the Eurozone and that issue, I think there's been some good developments in recent moments, and indeed in recent days, showing that the politicians and the leaders in the Eurozone recognize more needs to be done, and they want to do it.

They care about their currency. They want it to work. They know they need to take steps to make it a success, and it's not just in their interest. It's in the rest of the world's interest that they do that.

(END VIDEO CLIP)

QUEST: The British prime minister, David Cameron, talking to me earlier here in Davos. Now I'm joined by Michael Andrew, the global chief of the financial services giant, KPMG. Good to have you with us.

MICHAEL ANDREW, CHAIRMAN, KPMG INTERNATIONAL: Thank you.

QUEST: Now, there's a lot of gloom, there's a lot of dismay, there's a lot of worries about what's happening out there in the economy. But you have a different perspective, and it comes from a geographical perspective.

ANDREW: Well, I'm based in the Asia Pacific region, Richard, so I see a very different story, where people in fact are in the Eurozone crisis but announced they were sensitized to it, and are really looking at different trade routes, different supply chain, but just -- so we really stand to look at really the long-term strategies, and of the (inaudible) growth, especially now that we're seeing the United States' economy start to again resurgent (ph).

QUEST: As my friend, John Defterios from Global Exchange has been banging on all week, do you think there's a decoupled -- a decoupling going on, or has it already happened?

ANDREW: It's, you know, it's in transition at the moment. There is a decoupling going on.

QUEST: But there is always the risk that the Eurozone clobbers the growth adjusting, so what are your clients telling you?

ANDREW: Our clients are now looking to basically how they can diversify in the emerging developing markets of the world. So we're getting questions on how to do business in Africa, the Middle East, Asia, Latin America, Russia. These are the countries that are now being focused on by the major multinationals as the markets of the future.

QUEST: They are the future markets, but they -- (inaudible) who I speak to cannot afford to ignore the European and the U.S. markets, can they? So this is the conundrum they face at the moment.

ANDREW: Absolutely. This is not a short-term planning proposition. So (inaudible) the main concern in Europe is really the ability to get funding, to actually expand the business in the way that they want going forward.

And so the U.S. is really liking to see the consumers come back and have confidence to start buying their goods, whereas they're seeing the middle class in China and India really start to have an appetite.

(CROSSTALK)

QUEST: But is it worrying to you that we're seeing this -- the so- called 1 percent-99 percent, the inequality that exists that is within -- and corporations and CEOs are having to deal with that.

ANDREW: It's a huge issue for business. Business is going to have actually tell a story at the moment, and really start to look at some broader stakeholder interests to deal with these type of disparities.

QUEST: The moment I hear the word "stakeholder," I get worried. The moment I hear that word, "stakeholder," I get worried, Michael.

ANDREW: Are you a stakeholder, not a shareholder, Richard? That's a very important distinction. It means back -- if you look at the community in which you operate, (inaudible) workforce, it means looking at the NGOs that are in you marketplace.

QUEST: Yes, but when we talk here about the future of capitalism and the outdated or new models of capitalism, what do you mean by that?

ANDREW: Within responsible capitalism, things that actually improve the living standards of people, things that actually start to engage employment, lift educational standards. Those are the things we talk about in responsible capitalism.

QUEST: We'll talk more about that in the future. Time for you to have a go at the curve and I think --

ANDREW: I'll use a Swiss franc (ph) tonight, not a drachma, Richard.

QUEST: Not a drachma (ph). Carry on, mountain rescue. The dog that we saw earlier in the week that'll provide more of those. If anyone's using a color, which color would you like?

ANDREW: Well, I might, coming from China, use red (inaudible).

QUEST: Red? Red, of course, for the new year. OK.

ANDREW: Year of the dragon.

QUEST: Year of the dragon?

ANDREW: I'm inclined to be over here. So a little more optimistic than others.

QUEST: A little more optimistic. You're on the turn of the curve.

ANDREW: Thanks, Richard.

QUEST: Good to see you. Many thanks for joining us.

Now, when we come back after the break, it is a tug-of-war in Europe.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I was at a meeting in Berlin, and the government and ECB are saying lend more money and do all these things. And the regulators and examiners and boards are saying don't have any more exposure in Europe. OK, well, what do you want?

(END VIDEO CLIP)

QUEST: The head of JPMorgan Chase after the break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

QUEST: Now it won't happen overnight, but the consensus will and the consensus must be reached, so says the news of one of the world's top bankers.

Jamie Dimon is strong on the opinion of the ongoing European crisis. I asked the head of JPMorgan Chase how things were going on the home front as well. When you take the global economy, one part of the world is doing much better than others in the developed countries. It is, of course, the United States.

(BEGIN VIDEO CLIP)

JAMIE DIMON, CEO, JPMORGAN CHASE: Yes, well, the game (inaudible) has always been the risk of geopolitics, and that when you think things are great, and now you've always got geopolitics. And honestly, you've got Europe.

You know, it's a major issue, but it's not a hidden issue. It's not a black swan, it's not hiding behind a tree somewhere, it's kind of right in front of us and it -- so that one thing will -- could have a huge effect on the global economy.

QUEST: How would you describe your own personal view on the inability of the Europeans to actually deal with this crisis in the Eurozone?

DIMON: OK, so let me give you my own personal point of view. First of all, it's a -- it's one of the greatest endeavors of all time, trying to get the European Union and the European monetary union put together.

So -- and, oh, I'm talking about over 50 years. It's now run into this huge bump in the road, because if you listen to Chancellor Merkel, President Sarkozy, they're devoted to getting over the bump in the road. I think it's the right thing to do. It's really complex, 17 nations, you know, a lot of parliaments.

And I -- if I -- I still would make the bet they're going to get through this thing by hook or by crook over time. It's just not going to be in one thing, you wake up tomorrow and it's fixed.

QUEST: It's by hook or by crook that's causing the problems.

DIMON: Right. That's correct.

QUEST: It's too slow.

DIMON: Yes. And -- but and the slower it is, the more -- the risk is something that will go -- we can't control, but the fact is that ECB did something very big the other day. Spain and Italy are making progress.

Hopefully the Greek restructure will take place. Hopefully, countries will do things to make themselves more competitive, and maybe when we hear in a year or two, this is not going to be an issue.

QUEST: Come over here.

DIMON: Yes.

QUEST: You're going to have to put your hand in your pockets and give me a franc, a euro, a dollar or a pound because it's going to mountain rescue charity (ph), where on the curve of recovery do you think we are at the moment?

DIMON: Right here, though I want to say I think there -- I think it's a really complex job. I think they're going to get ahead of it. The one thing I had -- I would hope for is that I wish people collaborated more, you know, business, regulators, governments -- it's completely obvious to me that governments, banks -- we're all acting at counter purposes.

I was at a meeting in Berlin, and the government and ECB are saying lend more money and do all these things. And the regulators and examiners and boards are saying don't have any more exposure in Europe. OK, well, what do you want? Because we --

(CROSSTALK)

DIMON: We could do either.

QUEST: That's a really important point --

DIMON: Right, but you can't do it if you're going to be punished by, you know, regulators. So I think it would be good if people got together and said, what are we trying to accomplish, because I think anything can be accomplished.

QUEST: So what are you -- (inaudible) your message to regulators, get off your back?

DIMON: We -- no, no, we should -- people should sit down together, collaborate, have conversations, make some big decisions and move on. Like this is four years after the crisis. We haven't resolved anything about mortgages in the United States yet, and it's hurting the mortgage market. So let's sit down and fix it, and I think it's fixable.

(END VIDEO CLIP)

QUEST: Strong views from Jamie Dimon of JPMorgan Chase. And Mr. Dimon also made clear that at his bank, the condensation (ph) element is in shares for bonuses and they have no severance packages, and in his words to me earlier, he said there are no parachutes. Well, tonight, the bonus issue rumbles on in the U.K. ahead of RBS.

Government owned, nationalized RBS, Royal Bank of Scotland, says it will give its chief executive, Stephen Hester, a share-based bonus for last year worth $1.5 million. In pounds, 963,000 pounds.

Now why that number's significant, because the U.K. government had insisted that the bonus was under a million pounds, way down from last year's 2 million bonus, but it seems RBS has given less than a million to Stephen Hester. That's Stephen Hester.

So the bonus is showing, in fact, online, on CNN.com. I've written a blog, and it is the issue. It's all about bonuses, and you can give me your views on the bonuses at CNN.com, @richardquest. Now the bell, we don't have the bell this evening, because no bell that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Yes, we do have the bell, over here.

Whatever you're up to in the hours ahead, I hope it's profitable. "MARKETPLACE EUROPE" is next.

(COMMERCIAL BREAK)

QUEST: From the World Economic Forum in Davos, this is MARKETPLACE EUROPE. I'm Richard Quest, and this art installation is called "They Come to Help Us," which is rather appropriate for an organization committed to improving the state of the world. On this program, we will take the Davos agenda and put it into a business perspective for Europe.

In a moment, coming up, one advocates paying more tax to help his government. The other has threatened to move his company's operations abroad to avoid higher tax. This week, I sit down with Maurice Levy, chief executive of Publicis. And the head of the drinks company Diageo, Paul Walsh, insists when it comes to tax, enough is enough.

Davos is all about networking, making new contacts -- hello -- and renewing old acquaintances. For European business leaders, that's never been more important.

Hello.

UNIDENTIFIED MALE: Nice to see you.

QUEST: With the Eurozone facing recession, learning how to do business in these difficult times is what's really important. I discussed this with Maurice Levy, the head of Publicis.

(BEGIN VIDEO CLIP)

MAURICE LEVY, CHAIRMAN AND CEO, PUBLICIS: The solution (inaudible), the solution were easy, I think that they would have been found without Davos.

What Davos is helping is capitalizing the energies and making people aware at the same time of the issues and, for example, we had a discussion this morning about how companies should contribute more to job creation and to solving some of the issue of government (ph).

(MUSIC PLAYING)

QUEST: What do people want from European leaders?

LEVY: I think that --

QUEST: Business community, business communities like this?

LEVY: Business community would like that they come to an agreement in the Eurozone regarding the way to solve the problem of the euro and the debt level. We have a situation which is just impossible with the level of the debt at the Eurozone, more than 80 percent.

So this has to be stopped. And we have also to clean up the situation regarding Greece. When these two clear signals will be given, trust will come back.

We have not an issue of money. We have not an issue of liquidity, we have not an issue of the amount of debt. We have an issue of trust. People are today in older (ph) countries worried about the future, and they don't trust that the leaders, the political leaders will solve the current situation.

QUEST: In that environment, is it much more difficult to make investment decisions?

LEVY: Yes, because we are in a world of uncertainties. So the level of risk is difficult to appreciate and to make investment decision with a level of risk that you cannot clearly anticipate is difficult. But that is part of the job of CEOs. We have, I think, time to make some decision, and we do that.

QUEST: You went well and truly out on a limb, as we say, on the taxation question, didn't you? I mean, there you were, Maurice Levy, champion of taxation.

LEVY: To a degree. And it was not only champion of taxation -- I'm sorry. It was a full set of measures by which I was saying we have to address the deficits. We have to address the debt level, and for that, people will suffer. And it is absolutely an abomination to see that the poor people will suffer more if the rich people are not contributing disproportionately more. And I'm willing to do that if and when governments are taking the right actions to fix the public deficits.

QUEST: Tell me why we should be any more optimistic in the business world in Europe in 2012, bearing in mind the unmitigated inability of leaders to have dealt with the crisis?

LEVY: First we should stop bashing -- I'm telling you the truth. We should stop bashing political leaders. Yes, you can take your glasses off and on. I think that clearly they are having a very tough job.

They are -- they have, most of them, inherited the situation, which is terrible, during 40 years, 30 years, we have been spending much more money that we could imagine one day we will have. So we have to stop it, and currently to stop that, it's very difficult.

(END VIDEO CLIP)

QUEST: Maurice Levy of Publicis. After the break, more chief execs from the halls of Davos. We meet Paul Walsh, the head of Diageo. The drinks company chief can spend his money anywhere in the world. So why would he continue to invest in Europe?

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: It was Mark Twain who famously said, "Talk of my death is greatly exaggerated." We might very well put that idea to the test when we think about the European marketplace. With so much of the continent facing recession, can business in Europe thrive?

(BEGIN VIDEO CLIP)

MARTIN WITTIG, CEO, ROLAND BERGER STRATEGY CONSULTANTS: Well, I think if you find balance proposition (ph) right here, we have in the World Economic Forum, there's a group of younger people, called Young Global Leaders, and now also the Global Shapers. And when you talk to younger people and see their enthusiasm and energy, it's, I think, quite a lot of cause for optimism.

QUEST: Do you still think Davos is --

WITTIG: (Inaudible)?

QUEST: Well, you know, we always come to Davos. We always come to Davos, and we spend most of the time saying is it worth being here?

WITTIG: No, I think you -- at the end of the day, you get extraordinary insight from people you meet, from people you discuss with, from -- you get a feeling, how the -- how the whole mood is globally.

DA ROLD: We have two, so two good markets (ph) to have, to have optimistic.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

QUEST: If you're going to talk to Paul Walsh, the chief executive of Diageo, you'd better do it at the bar. Well, in this case, it's a health bar here at Davos. But nonetheless, Paul, good to see you.

When you look at your business, 30 percent is in Europe. A crucial part of Diageo, but probably your most worrying part at the moment.

PAUL WALSH, CEO, DIAGEO: It's certainly a zone that occupies a lot of my attention around contingency plannings, but also on how we get growth out of Europe, because, as you say, it's 30 percent. We still have to find a way to grow. And there are pockets of growth in Europe.

QUEST: (Inaudible) the growth challenge is twofold. Firstly, it's because of recession, and secondly or (inaudible) -- and secondly, it's because it's very mature markets.

WALSH: That's true, but equally, we find even in markets such as Greece, that have gone through some huge economic shocks, we're still finding the high end of our portfolio is growing. So you still have this bifurcation between those who have disposable income and those who do not. And for those that have, our products are attractive items.

QUEST: So if you're going to allow that to happen (inaudible), does that -- I hesitate to use the word, make you immune from a recession, but nobody is immune. But does that make you counter cyclical?

WALSH: I think we are recession resistant. Even if you go back to 2008, 2009, in aggregate, the firm continued to grow, not at the growth rate that we would like, but we continue to grow.

QUEST: Do you regret your comments on U.K. taxation, the 50 percent taxation?

WALSH: Not at all. It was interesting to hear President Obama talking about having to tax the wealthy at 30 percent. There's a big difference between giving more than you earn to the government around the whole psychology of tax structures.

QUEST: How do you sell that myth in a society which, whatever the logic and correctness of the logic might be, when austerity's being imposed, and those at the bottom of the heap, whatever you like, taking cuts? You can see the difficulty setting up logical methods (ph).

WALSH: Fortunately, how do I have to sell it, it's just my opinion.

(END VIDEO CLIP)

QUEST: That's MARKETPLACE EUROPE for this week. I'm Richard Quest. I've escaped from the Congress Center, and now up on the mountain. I promise you, one year I will get to enjoy the skiing. But until then, whatever market you're in, I hope it's profitable.